Friday, August 15, 2014

Writing on a clean slate: 7th Circuit affirms dismissal of claims against Dark Knight film

I previously discussed
here the lower court opinion dismissing the infringement claim by
plaintiff, a software company, against WB for imagining a similarly named software
product in the most recent Batman movie.There’s a debate in US trademark scholarship over the relative
desirability of “internal” limits on trademark law (those we deem inherent in
the nature of what trademark should protect) versus “external” limits
(especially the First Amendment).Internal limits too often give way when courts perceive the defendant as
a miscreant; but external limits too often are avoided by declaring trademark
to be about protecting against confusion, and thus undeserving of First
Amendment scrutiny.This opinion,
affirming a dismissal that used First Amendment reasoning as part of its
belt-and-suspenders treatment of the infringement claim at issue, avoids the
constitutional path in favor of internal limits. (Side note: technically WB asserted a Rogers v. Grimaldi barrier to liability, which can be conceived of as an internal limit, but the theory behind it relies on the idea that the First Amendment poses a barrier to infinite trademark liability, so WB's/the Seventh Circuit's shorthand makes sense.)

Recap (incidentally, this might be the first court opinion
to use the term “spoiler alert”): Fortres Grand sells a desktop management
program called “Clean Slate” and has a federal registration for the term for “[c]omputer
software used to protect public access computers by scouring the computer drive
back to its original configuration upon reboot.”It can be used in places accessible to many
people, like schools and libraries, to keep public computers working and free
of private data. The Dark Knight Rises used “the clean slate” to describe a hacking
program that could eliminate all records of a person.Fortres Grand sued, blaming WB for a
precipitous drop in sales of its software and alleging forward and reverse
confusion.

The “clean slate” program is an important plot point in the movie, forming
Selina Kyle’s motivation, and apparently used by her in the end to achieve her
happy ending with Bruce Wayne.Also, as
part of the marketing for the movie, two websites—that is, two Tumblrs—were
created purporting to be affiliated with the fictional Rykin Data Corporation,
which made “the clean slate.”WB stated
that it didn’t actually create those sites, but instead they were created by
fans of the movie.But for failure to
state a claim purposes, the court of appeals assumed that the allegation that
WB created the sites was true.

The Tumblrs contained descriptions of the clean slate
hacking tool and an image of a fictional patent. “Nothing was available for
purchase or download from the websites—they were purely an informational
extension of the fictional Gotham City universe.”

Fortres Grand suffered a significant decline in sales after
the release of the movie.It alleged
that this decline was due to potential customers mistakenly believing that its
Clean Slate software is illicit or phony because of WB’s use of the name “the
clean slate” in the film—a particular harm to Fortres Grand, whose product
promise relies on trustworthiness.

The court of appeals began its review by noting that “[a]llegations
of consumer confusion in a trademark suit, just like any other allegations in
any other suit, cannot save a claim if they are implausible.”(Not all courts believe this!)Fortres Grand’s state and federal claims
depended on plausibly alleging that WB’s use of “clean slate” was likely to
cause confusion.“But general confusion
‘in the air’ is not actionable. Rather, only confusion about ‘origin, sponsorship,
or approval of … goods’ supports a trademark claim.”

Fortres Grand abandoned its forward confusion arguments on
appeal, and argued only reverse confusion.This required plausible allegations that WB’s use of “clean slate” to
describe a hacking program in its movie caused a likelihood that consumers
would be confused into thinking that Fortres Grand’s Clean Slate software “emanates
from, is connected to, or is sponsored by [Warner Bros.].”

The court applied its seven-factor test for likely
confusion, except for the alleged infringer’s intent to palm off its goods as
those of another, since that was “irrelevant” in a reverse confusion case where
the junior user isn’t trying to profit from the senior user’s brand.What remained: (1) similarity of the marks;
(2) similarity of the products; (3) area and manner of concurrent use; (4)
degree of care likely to be used by consumers; (5) strength of plaintiff’s
mark; and (6) actual confusion.

The district court relied heavily on the dissimilarity
between Fortres Grand’s software and WB’s movie.Fortres Grand argued that one factor
shouldn’t have been so important, and that the proper comparator was the
fictional software of the fictional Rykin Data.The few cases to deal with this issue have considered “the likelihood of
confusion between the senior user’s product and the junior user’s creative
work—not any fictional product therein.” That generally makes sense under Dastar, which focuses on confusion about
the origin, sponsorship, or approval of “the tangible product sold in the
marketplace.” But, in forward confusion
cases, the movie is the junior user’s only tangible product sold in the
marketplace; that isn’t true in reverse confusion cases.(In an aside that I can only assume will
cause trouble later, the court commented that “We think, in general, the
relevant question of source in the context of a download is which entity is
responsible for the file hosted on the server which is downloaded by the
consumer.”Responsible for the file being hosted on that particular
server?Or responsible for the contents
of the file?Consider the effects on
trademark infringement claims based on hosting of unauthorized copies of
movies.)

Nonetheless, because the infringing act is the junior user’s
use of the mark “in connection with any goods,” the court concluded that
“goods” meant the same thing throughout, and thus that the movie was the
correct comparator product even in reverse confusion cases.Also, the Rykin Data Tumblrs were ads for the
goods, that is, the movie.

But dissimilarity of products isn’t dispositive of
confusion.The question is whether the
products were of the kind the public attributed to a single source. Previously,
the Seventh Circuit held that there was a fact question on that where the evidence
showed that the senior user made electrical fuses bearing the “TRON” mark and
that Disney (the allegedly infringing junior user) made videogames, toys, and
licensed telephones bearing the “TRON” mark.The court held that “utilitarian electrical products” could be confused
as originating from the same source as “entertainment-based” products powered
by electricity when both are labeled “TRON.” The court now commented: “It is
also plausible that entertainment-based products could be confused as being
affiliated with (by means of licensing) the same source as a movie.”

Still, that didn’t help Fortres Grand, which alleged
confusion “regarding the source of a utilitarian desktop management software
based solely on the use of a mark in a movie and two advertising websites.” WB,
unlike Disney, wasn’t selling any movie merchandise bearing the allegedly
infringing mark that was similar to Fortres Grand’s software.WB does sell video games, and that might be
similar enough to desktop management software to make confusion plausible [ed.
note: really?], but Fortres Grand didn’t allege that the video games bore the
“clean slate” mark. Nor did it allege that desktop management software was a
commonly merchandised movie tie-in (as a video game might be). Thus, the only products available to compare—the
software and the movie—were “quite dissimilar, even considering common
merchandising practice.”No alleged
facts made it plausible that consumers would think that a single producer was
likely to put out both.

True, courts shouldn’t rely on the weakness of a single
factor to dispose of an infringement claim.(Never?Well, hardly ever.)But Fortres Grand’s allegation was just as implausible
considering the other factors.Both
parties’ products are available on “the internet,” but the movie started in
theaters and Fortres Grand sells only from its website, not in other
places.(Was this alleged?)“And anyone who arrives at Fortres Grand’s website is very unlikely
to imagine it is sponsored by Warner Bros. (assuming, safely, that Fortres
Grand is not using Catwoman as a spokesperson for its program’s efficacy).” The
movie websites (I think this means the Tumblrs) are also on the internet, but
they “sell no products and are clearly tied to the fictional universe of
Batman.”Moreover, WB’s use was “not a
traditional use in the marketplace, but in the dialogue of its movie and in
extensions of its fictional universe, so the ‘the area and manner of concurrent
use’ also makes confusion unlikely.”

In addition, Fortres Grand alleged that consumers of
security software were discerning and “skeptical,” indicating a higher degree
of care. Plus, “clean slate” is a common phrase often used to describe fresh
starts or beginnings.(Here the court
cites several internet sources that I doubt were alleged or judicially noticed
under the usual procedure; that doesn’t bother me for the definitions, but why
single out Cleanslate
Chicago?)The descriptive use of “clean
slate” in the movie’s dialogue “to describe a program that cleans a criminal’s
slate” was unlikely to cause confusion, and this is particularly relevant in a
reverse confusion case where the strength of the mark in relation to the junior
user’s goods is important.

Fortres Grand also alleged actual confusion based on “internet
chatter” and “web pages, tweets, and blog posts in which potential consumers
question whether the CLEAN SLATE program, as it exists in The Dark Knight
Rises, is real and could potentially work.”But that wasn’t an allegation of actual confusion. Instead, consumers
were speculating that there really could be a hacking tool of this
caliber.“At best Fortres Grand’s
argument is that consumers are mistakenly thinking that its software may be
such a hacking tool (or an attempt at such a hacking tool), and not buying it.
But this is not reverse confusion about origin. Whoever these unusually
gullible hypothetical consumers are, Fortres Grand has not and could not
plausibly allege that consumers are confused into thinking Fortres Grand is
selling such a diabolical hacking tool licensed by Warner Bros.”

Nor was Fortres Grand’s alleged drop of sales enough to make
confusion plausible.Fortres Grand
alleged that the movie turned online searches for “clean slate” into hundreds
of results relating to the program from the movie, and that it had to spend
money on corrective advertising.But
that just means that, logically, Fortres Grand sold less when its website
showed up lower in search results. “And proof that internet searchers are more
interested in exploring the feasability of a fictional hacking tool than in
Fortres Grand’s desktop management software is not proof that they are confused
about the source of Fortres Grand’s software.”

Fortres Grand was really sad that WB’s use of “clean slate”
tarnished its mark by associating it with illicit software.But that’s a dilution claim, and it wouldn’t
be appropriate for a “contorted and broadened combination of the ‘reverse
confusion’ and ‘related products’ doctrines to extend dilution protection to
non-famous marks which are explicitly excluded from such protection by statute.”

The only factor that favored Fortres Grand was the
similarity of the marks.(And we’ve just
given up on “mark” having any meaning at all applied to defendant’s use.For the record: WB’s use wasn’t a
“mark.”It was the name of a fictional
product that WB did not sell.)Given the
weakness of all the other factors, similarity wasn’t enough. Trademark protects
source identification, not words themselves.Fortres Grand’s reverse confusion claim was “too implausible to support
costly litigation.”

Creative Commons/disclaimer

Text on this blog is licensed under a Creative Commons Attribution 2.5 License. Pictures and works quoted may be subject to other parties' copyrights.
I speak for myself. On this blog, I do not and cannot speak for Georgetown Law, the Organization for Transformative Works and/or AO3.